Goldman Sachs Semiconductor Stocks: Top 12 Picks

10. Applied Materials, Inc. (NASDAQ:AMAT)

Goldman Sachs Stake: $1,293,999,933

Number of Hedge Fund Holders: 89

Applied Materials, Inc. (NASDAQ:AMAT) is among Goldman Sachs’ top semiconductor stock picks. On January 16, KeyBanc Capital Markets boosted its price target for Applied Materials, Inc. (NASDAQ:AMAT) to $380 from $285. KeyBanc maintained an Overweight rating on the stock, citing Applied Materials’ “diversified supplier position and potential benefits from increasing deposition and etch intensity.”

The analysts noted that Applied Materials stands to gain from growing demands in deposition and etch processes as advanced chips shift to vertical structures, even extending into DRAM memory. They pointed out that the company has seen less stock value growth compared to competitors like KLA Corporation and Lam Research. And the main reason is its greater involvement in older technology nodes for customers in China and elsewhere.

KeyBanc emphasized Applied Materials’ role in conventional DRAM, calling it “arguably the AI-related device facing the most scarcity.” This could open doors for more production capacity and business expansion, the analysts stated. And looking ahead, the firm predicts steady growth in Applied Materials’ Global Services area. It expects low double-digit revenue increases in fiscal years 2027 and 2028, which it said will come on the back of customers using existing equipment at full speed.

Separately, on January 15, Barclays upgraded Applied Materials stock from Underweight to Overweight. The firm said that the move was driven by the expected impact of AI-related spending on the semiconductor industry.

Barclays noted that although the timing and scale of AI deployments remain debated, proposed AI spending points to a “multi-year earnings tailwind” for semiconductor suppliers such as Applied Materials. The analyst team said concerns around China competition and exposure had already been reflected in the stock’s valuation.

Applied Materials, Inc. (NASDAQ:AMAT) is a semiconductor equipment company. It develops and manufactures materials engineering solutions used to produce integrated circuits, including deposition, etching, and inspection systems.